Accountancy in France

>> Choice of Legal Form in France

Foreign investments in France are controlled and can be subject to public agreement according to the origin of funds or nature of business. In practice, administrative agreements are rarely needed, but this should be checked before starting a project.

For individuals, working in France is easy if you are an EU national. Foreigners (outside the EU) will need to obtain legal documents and fill-in administrative documents prior to settling in France. You should consider this when choosing your directors or equivalent to conduct your business in France.


A foreign firm is not compelled to operate in France through a local company but can-do business through a permanent establishment or a branch. These branches will remain part of the foreign company and will not be legally independent but will have to comply with local tax obligations.

Such branches must be registered in

France and must issue local accounts in French Gaap. Branches must be compliant with company taxes, VAT and more generally to the French labour obligations.

Individual firms

Such firms are managed and developed  by a sole person, working in his own name. His business property is included in his personal property. Consequently, such businesses do not have limited liability and the owner can be sued on his own assets.

Accounting obligations are limited and are mostly necessary for tax purposes. Tax and legal periods generally last 12 months (one calendar year). Taxable profit or loss from operations for the year must be issued to the tax authorities on a special tax form within 3 months after year end. The total profit or loss from operations is considered as personal revenue for the individual and is included in his personal tax return.

Shareholding companies

These companies have a limited liability status and should be considered for more elaborated operations and bigger businesses. These are free to set their closing date.


The most common form is the Limited Liability Company (SARL) where each partner is only liable for the capital shares. The partners may be only one person or up to 100 people, either individuals or firms. Share capital is freely set in the by-laws by the partners as there is no minimum set by law.

These companies are managed by one or more directors (the Gérant) who may be or may not be a partner. However, if the “gérant” is a partner and receives wages, this could influence the level of social contributions and should be considered carefully.

LLCs are automatically subject to corporate tax and commercial taxes (VAT and “business” tax). Certain specific LLCs can choose income tax instead of corporate taxation.

The SAS:

A simplified Limited Company frame (SAS) was created to answer the need for middle size firms and subsidiaries of large LCs including subsidiaries of foreign groups as well as holding companies.

The organisation is much simpler than the LC particularly for management, AGM’s and accounting and legal documents.

This company frame is largely flexible: one shareholder minimum (individual or company), no minimum capital. The president of the SAS can be a company or an individual. The company’s management is carried out by a Chairman or by any desired management structure adapted to the needs of the business.

Some legal rules must be followed but most ways of functioning are determined by their own by-laws.

The SAS are automatically subject to corporate tax and commercial taxes (VAT and “business” tax).

The SA:

Limited Companies (SA) must have at least one shareholder (individuals or companies) without any upper limit. The minimum capital amounts to 37.000 euros and each shareholder is only liable for its capital involved. These structures can go public and can be listed (PLCs).

These companies are managed by a Board of Directors (Conseil d’Administration) which includes 3 to 18 members. The Chairman of the Board is appointed among the board and oversees the management. He may appoint officers in the day to day management of the firm.

LCs are automatically subject to corporate tax and commercial taxes (VAT and “Business” tax).

LCs functioning rules are legally strictly defined and their by-laws offer few possibilities to vary from the legal frame.

There are other forms of shareholding companies, however these are fairly uncommon and are normally not appropriate to set-up an activity in France. These would have limited liability and would be subject to corporate taxation, VAT and “business” tax.

Other types of companies

Other legal types of firms can be sorted between persons and shares capital companies.

Partnerships (SNCs, SCIs) are liable on their own property (just as individuals), jointly or separately. In most cases, SNCs and SCIs are deemed transparent and partners will have to pay taxes depending on their status, either income tax or corporate taxation. SCI are commonly used for the acquisition of real estate.

Latest version updated 16th October 2017

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